How to protect your business idea
Content
How to protect your business idea
A very enthusiastic entrepreneur approached recently asking for advice about his new innovative business idea. After a half-hour long briefing, I felt it was a brilliant and potentially very profitable idea and told him so. Then, looking like he just remembered something, he asked, ³If I ask you to help me develop this idea into a bankable business plan, how do I know that you won¶t go behind my back and try to start this business yourself?´ That was an excellent question. In my three years in business planning consultancy, I have helped scores of entrepreneurs get funding from banks, SEDCO, private investors and business partners. In fact, most of the people I have worked with who met the lenders¶ requirements where successful in getting funded. However, there is a sad story of one entrepreneur who, after I had developed his business plan, has I rejected by a financier, when in fact it was very bankable. A few months later, this guy told me that he had just seen in the newspaper a business providing a service which was exactly similar to his proposed business. After some investigations, it turned out that a relative of the financier whom he had approached had stolen his idea. Unfortunately, nothing could be done about it. At some stage in your entrepreneurial journey, you will probably wish to discuss your idea with a third party. This could be informally, such as seeking advice or encouragement from friends or family, or formally, by hiring a professional consultant, or forming a partnership or joint venture with another company. Remember, once you put an idea into the public domain it can no longer be considered confidential or a trade secret. You should therefore take steps to protect your business idea and intellectual property. Keep your business idea on a need to know basis Avoid telling all and sundry the important details or the strategy or business model of until you have taken steps to protect it. Control the number of copies of business plans that you distribute, and only give them to those who need to know. Most banks and finance companies are bound by client confidentiality and ethical rules which prohibit them from disclosing your ideas to other people. However, that may not stop unscrupulous employees from stealing
client¶s ideas and implementing them themselves or passing them on to friends or relatives. So, always clearly indicate on the cover of your business plan document that it is confidential. I would suggest the following wording:
THIS BUSINESS PLAN CONTAINS INFORMATION WHICH IS PROPRIETARY TO ABC. NO PART OF THIS PLAN MAY BE DUPLICATED FOR COMMERCIAL PURPOSES OR DISCLOSED TO THIRD PARTIES WITHOUT THE PRIOR CONSENT OF ABC.
Further, you might want to get the recipient of the business plan to sign a Non-Disclosure Agreement, containing wording similar to the above. The recipient will sign acceptance of this term, making him liable if it is proven that he stole or passed on your idea to someone. Intellectual property Your intellectual property is what sets you apart from competitors. It could be your company brand, invention, design or creative work. Protecting your intellectual property makes strong business sense. If you form a partnership or joint venture, draw up a contract defining who owns the idea and what the share of future profits will be. You must seek professional legal advice before taking any final decisions. . The business benefits offered by intellectual property are obvious. It can set you apart from your competitors, giving you a USP. It can be a valuable asset you can sell or license to others. But you won¶t be able to reap every benefit unless you manage your IP effectively. You need to begin by obtaining proper protection. There are four areas of protection
COPYRIGHT
Copyright protects creators and owners of the written word, art, photographs, music, sound recordings and films. It exists as soon as there is a record of the material that has been created. Zimbabwe¶s Copy Rights Act (Chapter 26:01) governs copy rights. Clarify your rights by clearly marking anything you wish to be protected with notification of your copyright and the year it was created. You must not copy anything without a copyright holder¶s permission. Damages awards can be severe. As part of your employment contract, make sure
that the copyright to material created in the course of employment is µassigned¶ to your business. Also make sure you own the rights to material you have paid a supplier or freelance to create.
DESIGN RIGHT AND REGISTRATION
The Industrial Designs Act (Chapter 26:02) protects your new and original designs from being copies by anyone. The design right protects the original designs of the shape or configuration of a product. It lasts ten years after the first marketing of articles made to the design. Without being granted permission, you cannot copy anything that is protected by design right. Make sure you own the design rights to your logo, website and any products you create.
PATENTS
Patents protect inventions and prohibit others from making, using or selling an invention without the inventor¶s permission. They are concerned with the functional and technical aspects of products and processes. Patents must be registered. Protection lasts for up to 20 years. Patents are governed by the Patents Act (Chapter 26:03)
TRADE MARKS
Trade marks distinguish goods and services. They include devices such as logos, names and slogans. They help customers to recognize a specific company¶s product. For example, a vacuum cleaner is a product, but Hoover is a trade mark. You must not use other companies¶ trade marks without permission. Trade marks must be registered. You can register your business name as a trade mark. Trade marks are governed by the Trade Marks Act (Chapter 26:04).
Case Study from an Entrepreneur: How I protected my intellectual property
I founded my company in 2004, a few months after I had invented a new method of breast support ± in basic terms, an invisible, backless and strapless bra. My concept is revolutionary because it does not work like anything invented before. For instance, it can support very large sizes. It happened because I had had problems finding a suitable bra to wear with a strapless evening dress I had bought. Rather than take the dress back ± and,
because I¶m a scientist ± I began cobbling something together in my bedroom from various bits of material. The results worked very well. I worked in a lingerie shop while studying, so I knew that other women experienced similar problems. I was sure I had come up with something that had a lot of commercial potential. I began to spend more time and money developing the idea. I knew that I had to file for patents and register the design so that my intellectual property would be legally protected. If you come up with a new idea, you have to do a lot of research to make sure it hasn¶t been described elsewhere. I didn¶t publicly disclose my idea before I had filed my application. Doing so can prevent you from getting a patent. It is a good idea to get people you work with on your designs to sign nondisclosure agreements. It can be wise to file a patent application during the research phase. It¶s a lengthy process ± it can take anywhere between two and three years before you know whether you have a patent. A patent covers more than one single design. The design must be new, inventive [in the sense that the design isn¶t obvious] and it must have an industrial application. I would really advise that you get a registered patent agent to help you. People sometimes say that patents can be µgot around¶. In many cases this is because the patent specification has been poorly written. I submitted drawings of my design to help with its description. Including all key information is crucial. Patenting a design is a very lengthy and expensive process. I reckon it¶s cost me over $10,000. This is because I have paid to work with a specialist patent agent. These are expensive, but it¶s important to make sure you are fully protected. Soon I hope to have full patent protection. Then I can fully reveal how my design works.
Join our mailing list today and receive regular insights to help you start or grow your business. Get a copy SME BusinessLink CD magazine full of tips, advice, success stories, business ideas and solutions to SME and entrepreneurial business problems. Go to the page SME BusinessLink for more information. Get a copy from Innov8 Bookshop 23 G.Silundika Avenue Harare, or simply email us at [email protected] or call / SMS +263 772 854 301 or 777 774 007 and we will send you a copy, COD only $5.00. Better still you can subscribe and save at only $25 for 12 months or $15 for 6 months.
A very enthusiastic entrepreneur approached recently asking for advice about his new innovative business idea. After a half-hour long briefing, I felt it was a brilliant and potentially very profitable idea and told him so. Then, looking like he just remembered something, he asked, ³If I ask you to help me develop this idea into a bankable business plan, how do I know that you won¶t go behind my back and try to start this business yourself?´ That was an excellent question. In my three years in business planning consultancy, I have helped scores of entrepreneurs get funding from banks, SEDCO, private investors and business partners. In fact, most of the people I have worked with who met the lenders¶ requirements where successful in getting funded. However, there is a sad story of one entrepreneur who, after I had developed his business plan, has I rejected by a financier, when in fact it was very bankable. A few months later, this guy told me that he had just seen in the newspaper a business providing a service which was exactly similar to his proposed business. After some investigations, it turned out that a relative of the financier whom he had approached had stolen his idea. Unfortunately, nothing could be done about it. At some stage in your entrepreneurial journey, you will probably wish to discuss your idea with a third party. This could be informally, such as seeking advice or encouragement from friends or family, or formally, by hiring a professional consultant, or forming a partnership or joint venture with another company. Remember, once you put an idea into the public domain it can no longer be considered confidential or a trade secret. You should therefore take steps to protect your business idea and intellectual property. Keep your business idea on a need to know basis Avoid telling all and sundry the important details or the strategy or business model of until you have taken steps to protect it. Control the number of copies of business plans that you distribute, and only give them to those who need to know. Most banks and finance companies are bound by client confidentiality and ethical rules which prohibit them from disclosing your ideas to other people. However, that may not stop unscrupulous employees from stealing
client¶s ideas and implementing them themselves or passing them on to friends or relatives. So, always clearly indicate on the cover of your business plan document that it is confidential. I would suggest the following wording:
THIS BUSINESS PLAN CONTAINS INFORMATION WHICH IS PROPRIETARY TO ABC. NO PART OF THIS PLAN MAY BE DUPLICATED FOR COMMERCIAL PURPOSES OR DISCLOSED TO THIRD PARTIES WITHOUT THE PRIOR CONSENT OF ABC.
Further, you might want to get the recipient of the business plan to sign a Non-Disclosure Agreement, containing wording similar to the above. The recipient will sign acceptance of this term, making him liable if it is proven that he stole or passed on your idea to someone. Intellectual property Your intellectual property is what sets you apart from competitors. It could be your company brand, invention, design or creative work. Protecting your intellectual property makes strong business sense. If you form a partnership or joint venture, draw up a contract defining who owns the idea and what the share of future profits will be. You must seek professional legal advice before taking any final decisions. . The business benefits offered by intellectual property are obvious. It can set you apart from your competitors, giving you a USP. It can be a valuable asset you can sell or license to others. But you won¶t be able to reap every benefit unless you manage your IP effectively. You need to begin by obtaining proper protection. There are four areas of protection
COPYRIGHT
Copyright protects creators and owners of the written word, art, photographs, music, sound recordings and films. It exists as soon as there is a record of the material that has been created. Zimbabwe¶s Copy Rights Act (Chapter 26:01) governs copy rights. Clarify your rights by clearly marking anything you wish to be protected with notification of your copyright and the year it was created. You must not copy anything without a copyright holder¶s permission. Damages awards can be severe. As part of your employment contract, make sure
that the copyright to material created in the course of employment is µassigned¶ to your business. Also make sure you own the rights to material you have paid a supplier or freelance to create.
DESIGN RIGHT AND REGISTRATION
The Industrial Designs Act (Chapter 26:02) protects your new and original designs from being copies by anyone. The design right protects the original designs of the shape or configuration of a product. It lasts ten years after the first marketing of articles made to the design. Without being granted permission, you cannot copy anything that is protected by design right. Make sure you own the design rights to your logo, website and any products you create.
PATENTS
Patents protect inventions and prohibit others from making, using or selling an invention without the inventor¶s permission. They are concerned with the functional and technical aspects of products and processes. Patents must be registered. Protection lasts for up to 20 years. Patents are governed by the Patents Act (Chapter 26:03)
TRADE MARKS
Trade marks distinguish goods and services. They include devices such as logos, names and slogans. They help customers to recognize a specific company¶s product. For example, a vacuum cleaner is a product, but Hoover is a trade mark. You must not use other companies¶ trade marks without permission. Trade marks must be registered. You can register your business name as a trade mark. Trade marks are governed by the Trade Marks Act (Chapter 26:04).
Case Study from an Entrepreneur: How I protected my intellectual property
I founded my company in 2004, a few months after I had invented a new method of breast support ± in basic terms, an invisible, backless and strapless bra. My concept is revolutionary because it does not work like anything invented before. For instance, it can support very large sizes. It happened because I had had problems finding a suitable bra to wear with a strapless evening dress I had bought. Rather than take the dress back ± and,
because I¶m a scientist ± I began cobbling something together in my bedroom from various bits of material. The results worked very well. I worked in a lingerie shop while studying, so I knew that other women experienced similar problems. I was sure I had come up with something that had a lot of commercial potential. I began to spend more time and money developing the idea. I knew that I had to file for patents and register the design so that my intellectual property would be legally protected. If you come up with a new idea, you have to do a lot of research to make sure it hasn¶t been described elsewhere. I didn¶t publicly disclose my idea before I had filed my application. Doing so can prevent you from getting a patent. It is a good idea to get people you work with on your designs to sign nondisclosure agreements. It can be wise to file a patent application during the research phase. It¶s a lengthy process ± it can take anywhere between two and three years before you know whether you have a patent. A patent covers more than one single design. The design must be new, inventive [in the sense that the design isn¶t obvious] and it must have an industrial application. I would really advise that you get a registered patent agent to help you. People sometimes say that patents can be µgot around¶. In many cases this is because the patent specification has been poorly written. I submitted drawings of my design to help with its description. Including all key information is crucial. Patenting a design is a very lengthy and expensive process. I reckon it¶s cost me over $10,000. This is because I have paid to work with a specialist patent agent. These are expensive, but it¶s important to make sure you are fully protected. Soon I hope to have full patent protection. Then I can fully reveal how my design works.
Join our mailing list today and receive regular insights to help you start or grow your business. Get a copy SME BusinessLink CD magazine full of tips, advice, success stories, business ideas and solutions to SME and entrepreneurial business problems. Go to the page SME BusinessLink for more information. Get a copy from Innov8 Bookshop 23 G.Silundika Avenue Harare, or simply email us at [email protected] or call / SMS +263 772 854 301 or 777 774 007 and we will send you a copy, COD only $5.00. Better still you can subscribe and save at only $25 for 12 months or $15 for 6 months.
